The Trump Administration Targets the Poor

Despite failing in their effort to repeal the Affordable Care Act, Republicans continue to stigmatize Medicaid recipients as spongers who take advantage of the system.

Photograph By Bill Clark / CQ Roll Call / Getty

Despite the impression you might get from social media and cable news,
there’s a lot more to the Trump Administration than the daily drama at
the White House. In policy terms, the real action is taking place at
other federal departments and agencies, where Trump’s Republican
appointees are trying to enact the Party’s radical and regressive
agenda.

This agenda has nothing to do with the economic nationalism and the
pledges to defend the welfare state—Social Security, Medicare,
Medicaid—that Donald Trump campaigned on. It is, instead, the agenda of
billionaires far more ideological than Trump, such as the Koch brothers,
the Mercer family, and the Ricketts family, who want to limit the
government’s role in areas ranging from the environment to labor
relations to health care to financial regulation. As the historian Josh
Zeitz pointed out in a piece for
Politico a couple of months ago, the ultimate aim of this agenda is to roll back
not merely the regulatory reforms of Barack Obama but the entire Great
Society vision of Lyndon Johnson.

On Thursday, the Centers for Medicare and Medicaid Services, or C.M.S.,
issued new guidelines that will allow individual states to impose work requirements on
recipients of Medicaid, the federal program that provides health-care
coverage to poor people. Since 1965, when the Johnson Administration
created Medicaid, the only requirement for enrolling in the program has
been eligibility based on income. Now, under the new guidelines, states
will be able to deny Medicaid to otherwise eligible people who fail to
meet the new work requirements.

The Medicaid announcement came a day after the Wall Street Journal reported that the Treasury Department is on the verge of relaxing federal rules
that oblige banks to lend in poor neighborhoods. Democrats and housing
activists have claimed that such changes could lead to the return of
“redlining”—a banking practice that for decades denied mortgage
financing to minority neighborhoods. Some banking experts said that the
changes being considered wouldn’t go that far, but that they could
reduce the incentives for banks to make loans, particularly mortgage
loans, in poor neighborhoods.

Both of these potential changes—to Medicaid and to bank rules—are the
work of Trump appointees who have been preparing the ground for months.
Seema Verma, the head of C.M.S., is a health-policy consultant from Indiana
with close ties to Vice-President Mike Pence, her state’s former
governor. Before joining the Trump Administration, she helped design
Indiana’s controversial Medicaid expansion program under the Affordable
Care Act, which forced Medicaid recipients to make monthly payments. The
Indiana plan didn’t include work requirements, but that was only because
Verma and Pence knew that the Obama Administration wouldn’t have allowed
them.

On her first day at C.M.S., Verma urged other states to follow Indiana’s lead in imposing
Medicaid charges, and she also hinted that the Trump Administration
would approve of new work requirements. On Thursday, Verma followed
through on that hint,
saying that C.M.S. would support “state demonstrations that require eligible adult
beneficiaries to engage in work or community engagement activities
(e.g., skills training, education, job search, caregiving, volunteer
service).”

Verma claimed that the changes were motivated by a desire to improve the
health and well-being of able-bodied Medicaid recipients—that the
Administration was only encouraging these people to join the labor
force. But, according to a study by the Kaiser Family Foundation,
more than half of all non-disabled adult Medicaid recipients already
work, and about eight in ten of them live in households in which at
least one family member works. What about the minority who don’t work?
Thirty-six per cent of them said that they were ill or disabled; thirty
per cent identified themselves as caregivers; fifteen per cent said that
they were students; and nine per cent said that they were retired.

Since the new guidelines contain exceptions for the disabled, students,
and caregivers, the new guidelines shouldn’t—in theory—affect these
groups. But what matters is how the rules are applied, not just what
they say. A lot of Medicaid recipients are poor, sick, or marginalized
people who don’t interact well with government bureaucracies. To
maintain their health coverage in states affected by the new guidelines,
they will have to obtain a doctor’s letter or prove that they have been
working or studying for a certain number of hours a week. And, in many
places, they will also have to pay premiums. “There are . . . countless
studies showing that charging premiums to people with very low incomes
will result in them not being able to pay and losing coverage,” Leonardo
Cuello, the director of health policy at the National Health Law
Program, told TPM.
“So that’s not an experiment.”

The changes to the banking rules are being pushed by Treasury Secretary
Steven Mnuchin and a former colleague of his from Wall Street, Joseph
Otting, the head of the Treasury Department’s Office of the Comptroller of
the Currency. According to the Wall Street Journal, Mnuchin and Otting
are working on a “major revision”
to the 1977 Community Reinvestment Act, which Congress passed to address
decades of discrimination in bank lending, particularly mortgage
lending. Rather than simply outlawing discriminatory practices, such as
redlining, the C.R.A. charged the regulatory agencies with making sure
that banks complied with a new set of rules.

Many of the reforms Mnuchin and Otting are preparing “could make it
easier for banks to meet certain lending requirements and lower
penalties for compliance problems,” the Journal story said. The system
the government uses to grade banks’ performance could be changed. And
the definition of community-development lending could be expanded to
include loans to businesses and infrastructure projects that don’t
solely serve the poor.

To be sure, neither Medicaid nor the C.R.A. is perfect. In a more benign
political environment, it might be possible to view one or both of these
new initiatives as well-meaning reform efforts. But, with respect to
regulations, there is little benign about the Trump Administration,
where deference to business interests and suspicion of the poor and
their representatives go hand in hand.

For decades now, the American Bankers Association and other financial
lobbying groups have been demanding relief from the C.R.A. In Mnuchin
and Otting, they have found two sympathetic listeners. Medicaid has long
been a target for conservative Republicans: if their efforts to repeal
the Affordable Care Act had succeeded last year, the Party would have
rolled back an expansion of the program that has enabled an additional
fifteen million Americans of modest means to obtain health insurance.

Despite failing in that effort, Republicans continue to stigmatize
Medicaid recipients as spongers who take advantage of the system. “I
think there are certainly cases where that happens,” Sarah Huckabee
Sanders, the White House press secretary,
said during one of her daily briefings last week. “We don’t think that’s the overwhelming majority, but certainly that’s an issue, and something we
want to be able to address.”

It’s the same Republican playbook from which the recently passed tax bill
was taken: favors for rich and powerful interest groups, cuts and
opprobrium for the poor. No wonder G.O.P. leaders are so reluctant to
criticize Trump. As I’ve noted many times before, he’s giving them what
they want.